Order by:
Aparana Kundi, Member
1. The complainant has filed the instant complaint under section 35 of the Consumer Protection Act, 2019 stating that son of the complainant purchased a health insurance cashless policy bearing no.11240566344900 on 14.12.2023 for the sum assured of Rs.5 lakhs. Unfortunately, the complainant started suffering from severe breathing problem and got admitted in Dayanand Medical College and Hospital, Ludhiana on 13.01.2024 and remained admitted there for about 7 days. The said Hospital gave the treatment to complainant as per the need and discharged her after seeing recovery on 20.01.2024. Treatment of the complainant is still continuing. After admission in the DMC & Hospital and after getting first aid, the son of the complainant given the intimation and documents as per the requirement to the employees of Opposite Parties and lodged claim CIR/2024/211222/1443487. After that the employees/staff of the Opposite Parties started inquiring the matter. Thereafter at 5.46 PM on the same day i.e. on 13.01.2024, the complainant received a text message from Opposite Party No.2 that "We have scrutinized your request for cashless treatment for the diagnosed disease of AKI" and demand some information from the doctors. Even after collecting the required information from the doctors of DMC&H, the employees of the Opposite Parties demanded information again and again from the Doctors for the reason best known to the Opposite Parties. The complainant suddenly received a text message from Opposite Party No.2 that vide which they rejected the claim and also cancelled the policy of the complainant. Alleged that Opposite Parties cancelled the policy straightway. The complainant also issued legal notice dated 09.02.2024 to the Opposite Parties, but to no effect. Due to act and conduct of the Opposite Parties, the complainant has suffered mental tension and harassment. Hence, this complaint. Vide instant complaint, the complainant has sought the following reliefs:-
a) Opposite Parties may be directed to continue the said policy as the Opposite Parties have received the premium regarding the said policy.
b) To pay an amount of Rs.3,24,394/- as per the bills of the labs and Hospital etc.
c) To pay an amount of Rs.2,00,000/- as compensation on account of mental tension and harassment and Rs.20,000/- as travel expenses.
c) To pay an amount of Rs.25,000/- as litigation expenses.
d) And any other relief which this Commission may deem fit and proper be granted to the complainant in the interest of justice and equity.
2. Opposite Parties appeared through counsel and contested the complaint by filing written reply taking preliminary objections therein inter alia that the the present complaint is filed without any cause of action, as the claim of the complainant was denied by the answering Opposite Parties on the ground of Pre-existing disease & Non- Disclosure of material facts. The insured/complainant by not disclosing the Pre existing disease before procuring the policy has violated the policy document/contract and also the core principle of insurance i.e. the Principle of Good Faith and had obtained the policy through concealment of material facts. Averred that the present complaint pertains to insurance claim under ‘Star Health Assure Insurance Policy’ bearing No. 11240566344900 valid from 14.12.2023 to 13.12.2024 covering the Complainant self for a sum of Rs.5,00,000/-. However it is submitted that the aforesaid insurance policy was issued to the insured by the answering Opposite Party subject to the terms and conditions of the insurance policy. The complainant had accepted the policy agreeing and being fully aware of such terms and conditions and executed the proposal form. Averred further that the insured preferred the claim in the 1st year of the policy. The complainant applied for approval of cashless treatment and insured has not come for reimbursement. As per complaint the complainant is requesting before this Commission to grant permission for treatment of AKI, thus it is clear that complainant/ insured had not undergone the surgery and wanted cashless approval through this complaint. The insured has not submitted any claim for reimbursement of the medical expenses towards the treatment of AKI at Dayanand Medical College and Hospital on 13.01.2024. Averred further that it was observed by the Opposite Parties that following documents are necessary for processing the claim:-
i. A letter from the treating doctor clarifying the duration of CLD with first consultation notes, past treatment records and all relevant investigations
ii. To provide the Endoscopic Variceal Ligation (EVL) discharge summary in 2023.
It has been observed from the submitted records that the insured patient had undergone treatment for Chronic Liver Disease since, 1 year. Moreover as per the report of field verification officer, the insured patient had a history of the Diabetes Mellitus since last 3 years. Averred that insured has not disclosed the above mentioned medical history/health details in the proposal form which amounts to misrepresentation/non-disclosure of material facts. As per the STANDARD CONDITIONS - 1. Disclosure of Information:-
"The policy shall be void and all premium paid thereon shall be forfeited to the Company in the event of misrepresentation, mis description or non-disclosure of any material fact by the policyholder."
As per the STANDARD CONDITIONS - 6. Cancellation
"The Company may cancel the policy at any time on grounds of misrepresentation, non-disclosure of material facts, fraud by the insured person by giving 15 days' written notice. There would be no refund of premium on cancellation on grounds of misrepresentation, non-disclosure of material facts or fraud."
Hence, the claim was rejected and the same was informed to the insured vide letter dated 14.01.2024. Averred further that the Proposer, in the Proposal form has affirmed that the Insured person was in Good health and that he has not consulted or taken treatment which could be gathered from the following:-
1. Are you in good health and free from physical and mental disease or infirmity. If not give details - Yes
2. Have you consulted / taken treatment/been admitted for any illness/disease / injury/Surgery - If yes, details - No
4. Have you ever suffered or suffering from any of the following:-
j) Disease of Stomach, Intestine, Liver, Gall bladder / Pancreas, Kidney, Urinary bladder, Urinary Tract Diseases - If Yes, since when - No
From the above findings, it is clearly evident that the insured is well aware of her past medical history and failed to disclose the same in the proposal form, which amounts to non disclosure of material facts thus violating the Cardinal Principle of the Insurance, making the Contract of Insurance voidable and unenforceable. Averred further that the complainant has got no cause of action and locus-standi to file the present complaint; the instant complaint is neither maintainable in law nor on facts; no deficient services have been rendered by the answering Opposite Parties as alleged by the complainant. On merits, all other allegations made in the complaint are denied and a prayer for dismissal of the complaint is made.
3. Complainant also filed replication to the written reply of Opposite Parties denying the objections raised by Opposite Parties in their written reply.
4. In order to prove the case, the complainant has placed on record her affidavit Ex.CW1/A alongwith copies of documents Ex.C1 to Ex.C75.
5. On the other hand, Opposite Parties have placed on record affidavit of Sh.Sumit Kumar, Senior Manager, Star Health & Allied Insurance Co. Ltd. as Ex.OP1,2/A alongwith copies of documents Ex.OP1,2/1 to Ex.OP1,2/12.
6. We have heard the ld. counsel for both the parties and also gone through the record.
7. It is proved on record that the complainant is the holder of Insurance policy namely “Star Health Assure Insurance Policy, bearing no.P/11240566344900 valid from 14.12.2023 to 13.12.2024 covering the complainant self. It is also proved on record that during the policy coverage, the complainant suffered shortness of breath, fever and vomiting and got admitted in Dayanand Medical College and Hospital, where she was diagnosed with Type 2 Diabetes Mellitus, Hypertension, Chronic Liver Disease, Sepsis, Shock, AKI and Right Thigh Cellulitis. It is also proved on the record that during the hospitalization, the complainant applied for cashless treatment with Opposite Parties. On receipt of cashless request, the Opposite Parties issued letter dated 13.01.2024 to the complainant requiring certain documents, which was duly supplied by the complainant, but on receipt of the documents, the Opposite Parties vide letter dated 14.01.2024, rejected the cashless request of the complainant and thereafter Opposite Parties issued letter dated 25.01.2024 to the complainant stating that they intend to cancel the policy with effect from 05.03.2024 and after that vide letter dated 24.02.2024, the Opposite Parties cancelled the policy of the complainant.
8. The Opposite Parties rejected the cashless request of the complainant, vide letter dated 14.01.2024, the contents of said letter are reproduced as under:-
“It is observed from the submitted records that the insured patient had undergone treatment for Chronic Liver Disease since 1 year and it was not disclosed to us at the time of commencement of Policy, which amounts to non-disclosure of material facts. Thus, the claim cannot be paid as per the Policy issued. Hence the claim is rejected and policy cancelled.
We are therefore unable to consider the approval for cashless treatment of the above diagnosed disease.
The rejection of cashless treatment of the complainant by Opposite Parties on the aforesaid ground is not genuine on the reason that in the policy document (Ex.C1), the complainant has mentioned her date of birth as 14.11.1963 and in the said document date of inception of first policy is mentioned as 14.12.2023, meaning thereby that at the time availing the first policy, the age of the complainant was 60 years, so it was the bounden duty of the Opposite Party-Insurance Company to get the life assured medically examined before issuing the policy in his/her name who was above the 45 years of age. As per the I.R.D.A.I Rules and Instructions with regard to thorough medical examination if the insured is more than 45 years which is reproduced as under:-
“As per instructions issued by the Insurance Regulatory and Development Authority of India (IRDAI), it was bounded duty of the insurer to put insured to thorough medical examination in case Mediclaim insured was more than 45 years and if insurance company failed to do so then insurance company has no right to decline the insurance claim on account of non disclosure of the facts of pre existing disease when the policy was taken. The above observations is supported by law cited in SBI General Insurance Company Limited Vs. Balwinder Singh Jolly” 2016(4) CLT 372 of the Hon’ble State Commission, Chandigarh.”
However, the Opposite Party-Insurance Company has not placed on record any evidence that before issuing the policy they ever got medically examined the insured. In these circumstances, the rejection of cashless treatment of the complainant on account of pre-existing disease by Opposite Parties is unjustified.
9. The other grievance of the complainant is that vide letter dated 14.01.2024 (Ex.OP1,2/9), the Opposite Parties rejected the claim of the complainant and also cancelled the policy and also issued letter dated 25.01.2024 (Ex.OP1,2/12), vide which they stated that they intend to cancel the policy with effect from 05.03.2024 and thereafter vide Endorsement Schedule dated 24.02.2024 (Ex.OP1,2/11) cancelled the policy. Since, the Opposite Parties have come to know of pre existing disease and are not intending to continue with the insurance policy in favour of the complainant. The Opposite Parties are at liberty to cancel the policy, but liable to refund the proportionate amount of the premium for the remaining period of the policy.
10. In view of the above discussion, the instant complaint is allowed in part and Opposite Parties are directed to pay the claim for medical expenses incurred by the complainant for the hospitalization period mentioned above during the coverage period (including pre and post hospitalization charges) on submission of relevant documents and medical bills by complainant. Further the complainant is hereby directed to submit the relevant documents alongwith medical bills to the Opposite Parties. Opposite Parties are further directed to settle and pay the claim next within 30 days from receipt of the copies of bills/documents from the complainant and also refund the proportionate premium amount of the remaining period to the complainant. The pending application(s), if any also stands disposed of. In case, the Opposite Parties failed to comply with the order within stipulated period as given, they are further burdened with additional cost of Rs.5,000/-(Rupees Five Thousand only) to be paid to the complainant for non compliance of the order. Copies of the order be furnished to the parties free of costs. File is ordered to be consigned to the record room.
Announced on Open Commission